List of Documents required for Closing Financial Due Diligence (FDD) in Real Estate Transaction

Any organization considering a deal needs to check all the assumptions it is making about that deal. Financial due diligence provides peace of mind to both corporate and financial buyers, by analyzing and validating all the financial, commercial, operational and strategic assumptions being made. It uses past trading experience to form a view of the future and confirms that there are no ‘black holes’.

The components of the service are revenue, commercial and market due diligence, synergy validation, maintainable earnings, future cash flows and all operational issues, as well as deal structuring.

Financial Statements

  1. Provide the audited/unaudited (signed by management) statutory accounts

Project Information

  1. Project level balance sheet, profit & loss account, and other detailed accounting schedules.
  2. With respect to projects under consideration, provide the following details:
    • Project note including details of project map, number of units to be constructed, built up area, saleable area, cost per unit, project launch date, date of commencement of work, expected completion & possession date and project brochure.
    • Sales MIS and Customer agreements, LOI with
    • Customer payment plans and actual dates of completion of activity/slabs as per payment
  3. Comparable Project details
  4. Joint Development / Redevelopment / Rehabilitation Basis / Transfer of development rights agreements
  5. Provide agreements/documents related to purchase of land / TDR / FSI” along with details of total consideration, payments made and to be made.
  6. Provide bank statements highlighting payments/deposits made towards
  7. Provide copies of all approvals and details of pending approvals
  8. Architect Certificate & CA certificate in respect of status of completion of project and cost incurred for project
  9. Details of total costs head/activities wise (year wise breakdown) already Also provide ledgers of the total cost incurred for the project under various heads from the beginning of the project.
  10. Provide details of projected cost.
  11. List of Contractors along with agreements and
  12. Cash Flow statement of the project along with profit statement.

Loan Funds (for entity under review)

  1. Details of any existing/outstanding loans and terms of the loan
  2. Copies of sanction letter and agreements entered into with the lenders, including those with banks, financial institutions etc. for loans outstanding and loan statements by a lender from beginning to till date for each loan facility.
  3. No Dues Certificate / Loan Closure Certificate in case of loan facilities closed during latest 3 years
  4. Details of Interest on loans taken in past
  5. Please provide details of securities provided to lenders. (Charges on assets, pledge of share etc.)
  6. Details of all charges over assets and all encumbrances (please provide ROC documents in support of the same).

Other Information (for entity under review)

  1. Provide list of related parties having interest in the business and the nature of interest along and transaction is done with them
  2. Details of all common (with related parties/companies) assets/ costs/rights to use/shared properties/assets along with methodology (along with computation) & key assumptions used to do the allocation of such shared services. Please provide details of allocation of central costs/overheads over various companies/business segments/properties, (if applicable).
  3. Details of contingent liabilities and guarantees/commitments given for or by the companies / Directors etc.
  4. Provide details of promoter group structure. Also, provide entity wise list of completed/ ongoing/ upcoming projects undertaken by promoter group along with details of area of the

Direct Tax (for entity under review)

  1. Corporate Tax Returns along with Tax Audit Reports, Internal audit reports, cost audit report & Transfer pricing reports if applicable for latest 2
  2. Status of payment of advance tax for the current financial
  3. Copies of all demand notices etc. received from taxation authorities. Current status of pending appeals / assessments/ litigations. Also, provide complete copy of recent assessment
  4. Returns of Withholding Tax / TDS along with supporting working & assessment orders for the last 2
  5. Provide details of Year wise defaults of TDS shown on Traces website in the default option after login on traces website (from beginning to till )
  6. Provide 26 AS
  7. Provide Screenshots as per Income tax website for the followings:
    1. Demand / Refund status
    2. Responses to outstanding tax demands
    3. View Return /Forms.

In-Direct Tax (for entity under review)

  1. Certificate of registration under various indirect taxes such as Service Tax, WCT, Professional tax, VAT / Sales Tax
  2. Copies of returns filed along with challans & supporting workings (Service Tax, WCT, Sales Tax, Professional Tax etc.) for the review period. Also, provide ledgers of all indirect taxes
  3. Details of any undisputed and unpaid demands penalties/ interest of Service Tax, WCT and Sales
  4. Copies of the notices and orders against which appeals have been filed, along with appeal memorandum and stay orders
  5. Up to which date service tax audit/sales tax assessments have been done by Provide copy of report /order along with relevant details and current status.
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